Job Loss Does Not Mean Home Loss: Tim's Story

Feb. 11, 2014

Written by

Dan McGookey

Tim is a construction worker who suffered an on-the-job injury and had been collecting worker’s compensation benefits for some time. The problem was that his weekly benefit of $236 a week was far less than his normal pay when working at his construction job. And despite the fact that he had a modest mortgage of $60,000, because he was raising several children on his own, he began missing his mortgage payments in May.

Based on his reduced income, Tim clearly qualified for HAMP mortgage relief, which would dramatically reduce his interest payments, potentially extend the maturity date of his loan and, in the end, reduce his monthly payment to an affordable level and keep Tim and his children in their home.

The law says that Tim’s bank should assist him through the HAMP loan modification process when he reaches out for help. However, Tim did that when he first began struggling making his mortgage payments, yet his bank didn’t do what it was supposed to.

Instead, it put him in foreclosure. Thus when Tim came to see us, he was armed with the complaint which sought to remove him and his children from their home. One look at the facts of his situation told us that Tim was yet another “false HAMP denial” victim. I would estimate that 50 percent of our clients fall squarely into this category. In this age of job loss and underemployment, when hard-working people are being laid off and replacing high paying jobs with those paying half as much, it is no wonder that so many people qualify for HAMP mortgage relief.

One of the tragedies is that people don’t realize that banks really don’t want to work with them in a fair and honest way to help them succeed on their mortgages and stay in their homes. Foreclosure is a profitable business for the banks, and there is no government enforcement of its own laws in this area. Thus banks are free to run roughshod over homeowners’ rights without fear of consequences. This leaves homeowners seeking mortgage relief to fend for themselves.

In the end, Tim will gain the relief that he is legally entitled to and not lose his home to foreclosure. Those who are not aware of their rights may not be as fortunate.

The general rule is this: If you suffer an income loss but still have an ability to make a make a mortgage payment that is 50 or 60 percent of the payment normally required, you should not lose your home. If you find yourself in a position with a sudden loss of income, keep that in mind.

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